Free Appellee's Brief - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELA WARE

In re:

Chapter 11

STONE & WEBSTER , INC. et al.
Debtors.

Case No. 00- 2142

(PJW)

Jointly Administered

THE SHAW GROUP , INC.

Appellant
- against -

A. No. :

07- 00616

(SLR)

THE SWE&C LIQUIDATING TRUST
Respondent.

RESPONDING BRIEF OF THE SWE&C LIQUIDATING TRUST TO THE APPEAL OF THE SHAW GROUP, INC. FROM THE BANKRUPTCY COURT' DENIAL OF SHAW' S MOTION TO INTERVENE

I The debtors are the Consolidated

particularly set forth in Article VII(B) of the Third Amended Joint Plan of the Debtors in Possession , the Official Committee of Unsecured Creditors , Federal Insurance Company, Maine Yankee Atomic Power Company, and the Official Committee of Equity Security Holders with Respect to (I) Stone & Webster
Incorporated and Certain of its

Constructors , Inc. and Certain of Its Subsidiaries (" Third Joint Plan ), certain debtor subsidiaries of Stone & Webster , Incorporated are merged into , Incorporated , and their estates have substantively consolidated to become the Consolidated SWINC Estate; and certain debtor subsidiaries of Stone & Webster Engineers and Constructors , Inc. are Constructors , Inc. , and their estates have SWE&C Estate. As of the Effective Date of the Joint Plan , all of the assets of the Consolidated SWE&C Estate were transferred to the SWE&C Liquidating Trust.
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TABLE OF CONTENTS
Page

INTR 0 D U CTI ON

II.

ISSUES PRESENTED AND STANDARD OF REVIEW............... ................. ............... 2
Statement Of The Issues Presented For Review.

Standard Of Review. ........................................................................................... 2
III.

STATEMENT OF THE CASE.......................................................................................
The Saudi Aramco Action. .................................................................................. 3

The SAMBA And Shaw Actions.
IV.

STATEMENT OF FACTS..............................................................................................

Shaw s Motion Is Merely An Attempt To Assert A Claim Against The Trust That Is Untimely Under Any Measure , And Would Prejudice The Trust's
Creditors If Shaw Can Assert The Claim Now.....................................................

This Court Has Determined Already That SAMBA Had No "Assignment Of Contract Proceeds " From BS&W , Much Less Any Assignment From SWEC So SAMBA Had No Rights Against SWEC To Which Shaw Could Succeed. .....
This Court' s Findings And Conclusions Bar Shaw s Claim Because The

Claim Neither Arises From An Assumed Contract , Nor Relates To An
Assumed Liability. .................................................... ................................... .....

Multiple Agreements And Orders

The Bankruptcy Case Preclude Shaw From Asserting Any Claim To The Proposed Saudi Aramco Settlement. ...........
In

SUMMARY OF ARGUMENT
VI.

ARGUMENT...................... ...
Shaw s Interest Derives From A Facially Deficient " Assignment" From A Non- Party To A Non- Party, And Cannot Support Intervention- Of- Right. .......... 18

III Like SAMBA , Shaw Lacks The Necessary Interest Or Article Standing To Assert A Statutory Right To Intervene................................ 18

Shaw Lacks A Sufficiently Protectable Interest To Support Intervention As A Matter Of Right......................................................... 21

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TABLE OF CONTENTS
(Contd.
Page

SAMBA' s Claimed " Assignment" Does Not Involve Common Questions Of Law Or Fact With The Trust's Claims Against Saudi Aramco , Precluding
Permissive Intervention. .................................................................................... 23

Shaw Unambiguously Released Any Claim " Relating To " Its Liability On The Guaranty And Payment Letter.
Shaw s Argument For Unjust Enrichment , And That The Bankruptcy Court Mischaracterized Its Claim , Are Not Only Incorrect But Contradictory. ............ 27

Shaw Fails To Make A Valid Claim For Unjust Enrichment. ................. 27 The Bankruptcy Court Did Not Incorrectly Characterize Shaw s Claim As Shaw Demonstrates By Arguing That Its Claim Is Really A Claim
For Unjust Enrichment Against The Trust. .............................................
In

Any Event , Shaw s Motion Is Untimely And Cannot Support Intervention On Any Basis.

VII.

CON CL USI

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TABLE OF AUTHORITIES
CASES
Page

Alexander v. Rendell 246 F. D. 220 (W. D. Pa. 2007) """''''''''''''''''''''''''''''''''''''''''''''''''''''''''''...................

Allegheny Gen. Hasp. v. Philip Morris, Inc. 228 F. 3d 429 (3d Cir. 2000)
Am. Mar. Transp. , Inc. v. United States
870 F. 2d 1559 (Fed. Cir. 1989) .......................................................................... 22 , 24Baron Budd, P. C.

v. Unsecured Asbestos Claimants Comm.

321 B. R.

147 (D. N.J.

2005)...........................................................................................
294 A.2d 104 (Del. 1972) ............................

Bramble Transp. , Inc. v. Sam Senter Sales, Inc. 294 A.2d 97 (Del. Super. Ct. 1971), aff'

Brody v. Spang, 957 F. 2d 1108 (3d Cir. 1992) .......................................................................................... 2

City ofCoatesville v. Del. Container Co. Civil Action No. 87- 1475 1988 U.S. Dist. LEXIS 11152 (E. D. Pa. Sep. 28 1988).................................................
Duttle v. Bandler

Kass 147 F. D. 69 (S. Y.), aff' d mem. 999 F . 2d 536 (2d Cir. 1993).......................................................
380 A.2d 13

, 31 , 32 , 33

Financeameria Private Brands, Inc. v. Harvey E. Hall, Inc.
Gen. Star Indem. Co. v. Virgin Island Port Auth. 224 F. D. 372 (D. V.I. 2004)............................................................................. 22-

Harris v. Pernsley,
820 F. 2d 592 (3d Cir. 1987) ............................................................................................ 2

Harris v. Reeves 946 F . 2d 214 (3d Cir. 1991).......................................................................................... 21

Heartwood, Inc. v. United States Forest Serv.
316 F. 3d 694 (7th Cir. 2003) ..............................................................................

Hillside Enters. , Inc. v. Carlisle Corp. 944 F. Supp. 793 (E. D. Mo. 1996) .................................................. ............... ....

, 20, 24

Hobson v. Travelstead (In re Travelstead), 227 B. R. 638 (D. Md. 1998)..........................................................................................

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III

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ABLE OF AUTHORITIES
CASES (Contd.
Page

In re Edison Bros. Stores, Inc. No. 99- 529 (JCA), 2002 Bankr. LEXIS 1228 (Bankr. D. Del. May 15 2002) ............................................. 33

In re Torrez
132 B. R. 924 (Bankr. E. D. Cal. 1991)........................................................................... 20

Lauren W v. DeFlaminis 480 F. 3d 259 (3d Cir. 2007) .......................................................................................... 27
Lucas v. McKeithen
102 F . 3d
MasterCard Int

171 (5th Cir. 1996).......................................................... ........................ .......
Inc. v. Visa Int

Servo Ass '

471 F. 3d 377 (2d Cir. 2006) ...............................................................................

Mausolf
85 F. 3d 1295 (8th Cir. 1996)

McDaniel v. Am. Druggists ' Ins. Co. (In re Nat'! Buy- Rite, Inc.), 11 B. R. 191 (Bankr. N. D. Ga. 1981) ............................................................
Mountain Top Condo. Ass ' n V. Dave Stabbert Master Builder, Inc. 72 F. 3d 361 (3d Cir. 1995) .......................................................................................
Nat'! R. R.

Passenger Corp. v. Pa. Pub. Util. Comm ' 342 F. 3d 242 (3d Cir. 2003) .......................................................................................... 19

Nicini v. Morra
212 F. 3d 798 (3d Cir. 2000) ...................................................................................... 2 ,
18

Pansy v. Borough of Stroudsburg, 23 F. 1994)........................................................................................ .. 19
Pasha Auto Warehousing, Inc. v. Phila. Reg'! Port Auth. Civil Action No. 96- 6779 1997 u.s. Dist. LEXIS D. Pa. Dec. 23 1997) ................................................ 22

3d 772 (3d Cir. ..
Rauscher Pierce Refines , Inc.
D. 180 (N. D.

Rigco , Inc.

v.

110 F.

Tex. 1986)..................................................................................
Webster Inc.),

Saudi American Bank v. Saudi Arabian Oil Co. (In re Stone

Civ. No. 06- 399- SLR , 2007 U.S. Dist. LEXIS 63941 (D. Del. Aug. 29 , 2007)................................................................................................. 10

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T ABLE OF
CASES (Contd.
Page
Saudi American Bank v. Shaw Group, Inc. (In re Stone

Webster, Inc.),

354 B. R. 686 (D. Del. 2006) ....................................,....................................................
Saudi American Bank v. Shaw Group, Inc. (In re Stone Webster, Inc.), Civ. No. 04- 834- SLR , 2005 U.S. Dist. LEXIS 7912 (D. Del. May 3 , 2005) .............

, 27

SEC v. Tipco, Inc.

554 F.2d 710 (5th Cir. 1977)......................................................................................... 34
Stewart v. Rubin 948 F. Supp. 1077 (D.

C. 1996).................................................................

Trump Taj Mahal Assocs. v. Alibraham (In re Trump Taj Mahal Assocs.), 156 B. R. 928 (Bankr. D. J. 1993) ............................................................................... 33
Travelers Indem. Co. v. Dingwell
884 F. 2d 629 (1st Cir. 1989) ......................................................................................... 32

United States v. Puerto Rico
227 F. R.D. 28 (D.

R. 2005)....................................................................................

Vazman , S.A. v. Fidelity In!'! Bank 418 F. Supp. 1084 (S. Y. 1976)..............................................................

Vertientes, Ltd. v. Internor Trade , Inc. (In re Vertientes , Ltd.),
845 F.
West Elecs. , Inc. v. Nat'! Union Fire Ins. Co. (In re

2d 57 (3d Cir. .
Sep. 14 ,

1988)........................................................................................... 34
1992) ........... 30

, Inc.), Civ. No. 91- 3781 (GEB), 1992 U.S. Dist. LEXIS 14503 (D. N.J.
STATUTES AND RULES

11 U. C. 9 105 ....................,................................................................................................... 11 U.
11 U. 11 U.
11 U. 11 U.
C. 9 363

C. 9 365 ........................................................................................................................

C. 9 1109 .............."...........................................................................................

, 19

C. 9 1129 ............................................................................................................. , 14 , 15

C. 9 1145 ......................................................................................................................
C. 9 1129

11 V.

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TABLE OF AUTHORITIES
STATUTES AND RULES

(Contd.
Page

Bankr. D. Del. L. R. 9018- 1....... .........................................................
Fed. R. Bankr. P. 2002.............................................................................................................. Fed. R. Bankr. P. 6004.............................................................................................................. Fed. R. Bankr. P. 6006.............................................................................................................. Fed. R. Bankr. P. 9014..............................................................................................................
Fed. R. Civ. P. 24 .............................................................................................................

passim

SECONDARY AUTHORITIES
Alan N. Resnick , Henry J. Sommer
Collier on Bankruptcy

(14th ed. 2006).............................. 19

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The SWE&C Liquidating Trustee (" Trustee ), on behalf of the
Trust (" Trust" ),
as successor- in- interest

to plaintiff Stone & Webster Engineering

SWEC" ), hereby responds to the Opening Brief Of Appellant The Shaw Group, Inc. (" Opening

Brief' ) on appeal from the bankruptcy court' s denial of Shaw s Motion to

underlying adversary proceeding against Saudi Arabian Oil Company (" Saudi Aramco
opposition thereto , the SWE&C Liquidating Trustee states as follows:

). In

I.
The tortured history of this and related cases belies the simple
Inc. (" Shaw ) is trying to

which Shaw did not assert a claim in the bankruptcy case (much less a timely claim), for which
Shaw released any potential claim in a settlement with the Trust , for which Shaw has no privity
to assert the claim , and for which Shaw delayed at least five years to assert , then tried to assert it

though the back door of intervention rather than through the ordered process of a proof of claim.

Even if it had a

Shaw waited until the Trust

engineered the settlement and now tries to deny the settlement to the creditors who funded the
efforts.

Shaw attempts to
SAMBA" ) to intervene in this same case - a theory that this Court labeled as " dependent on a

house of cards " when it denied SAMBA' s appeal from the denial of intervention. Shaw is one
step further removed from SAMBA' s claim to a settlement between the Trust and Aramco - and
therefore , Shaw can fare no
Shaw s attempts to intervene for Shaw s reliance on the
s appeal ,

this Court should deny

SAMBA' s appeal , and that require yet more legal fiction to concoct a Shaw claim.

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II.
Statement Of The Issues Presented For
Whether the Bankruptcy Court's
s right to

intervene-of- right under Rule 24(a)(2) is significant when the Bankruptcy Court found properly
that Shaw had no standing or sufficient interest to irItervene on any

Whether the Bankruptcy Court found correctly that Shaw could

claim to the Trust's settlement with Saudi Aramco , a party to which Shaw can show no privity or
right to subrogation.

Whether the Bankruptcy Court found correctly that Shaw s claim was in reality a

claim against the Trust , and not a claim against

, a party to which Shaw had no

privity or right to subrogation , and whether such a finding is even relevant.

Whether the Bankruptcy Court found
released any claim to be subrogated to SAMBA' s rights.

, III any event ,

Shaw had

Whether the Bankruptcy Court could have denied intervention based on Shaw
five- year delay, seeking intervention only when settlement seemed imminent.
Standard Of Review.

The reviewing court reviews a denial of a motion to
See ,
e.

g., Brody

957 F. 2d 1108 , 1115 (3d

more

stringent" for review of an order denying

, the reviewing court will affirm
Id.

unless the lower court " reached a decision that we are confident is mcorrect."
Harris v. Pernsley,

(quoting

820 F. 2d 592 , 597 (3d Cir. 1987)). The reviewing court is " more reluctant to

intrude into the highly discretionary decision of whether to grant permissive intervention.

Id.

The reviewing court may affirm on any
Morra 212 F. 3d 798 805 (3d Cir. 2000).
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See ,

e. g.,

Nicini v.

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III.
The Saudi Aramco Action.
Five years before Shaw sought to intervene , SAMBA moved to intervene in an adversary

proceeding brought by Stone & Webster ,

Incorporated

, and

in- possession

against Saudi Aramco.z As its basis for intervention , SAMBA claimed to have an " assignment

of (Saudi AramcoJ
BS&W" ), to SAMBA. SAMBA
BS&W'
s shareholders:

" from a

, but against
ASB&B" ),
and

SWEC and Abdullah

SAMBA moved to join ASB&B in the action.

Following the effective date of a plan of liquidation in the underlying
the Trust and the SWINC Plan Administrator substituted as successors- in- interest to the debtors.
By stipulation of the parties , the SWINC Plan Administrator later withdrew.

After the Trust's involvement in the adversary proceeding, the bankruptcy court ordered

the parties - including " proposed Intervenor" SAMBA - to mediation. 6 Though Shaw s counsel
attended the same hearing in which the bankruptcy court ordered mediation 7 Shaw did not ask

See

Complaint , May 31 2002 (D. I. #lJ (AI4).
but

this Responding Brief,

Nevertheless , for the Court' s convenience , the Trust cites to pages in Shaw s Appendix when the A -" in parentheses cited document can be found
following the citation. In

, the Trust cites to

, date ,

docket

number , and if not filed in the
proceeding number.
See

, by case or adversary

Motion To Intervene And To Join Abdullah Said Bugshan & Brothers As A Defendant
#19J (A220).

November 7 2002 (D. I.
See

Notice Of Substitution Of Parties And Of Counsel , March 10 2004 (D. I. #26J.

Order Approving Stipulation Of Withdrawal , August 26 2005 (D. I. #34J. 6 Order Referring Adversary Proceeding To Mediation , June 10 2004 (D. I. #28J.
See

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In Sheet , May 18 2004 (D. I. #5109 , Bankruptcy Case No. 00- 2142).

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for the opportunity to participate in the mediation between the Trust and Saudi Aramco. Though
the bankruptcy court' s order referring the matter to mediation provided that " other
interested

parties may participate in the
Mediator s fees and expenses g Shaw did not ask to participate.
At a hearing on April 25 , 2006 ,

the bankruptcy court denied SAMBA' s motion to

intervene. 9 Though moving

, SAMBA neither pursued joinder in its

briefing l0 nor argued for joinder at the

Although SAMBA is

bankruptcy court' s denial of SAMBA' s Motion to intervene , and from this Court' s affirmance of
that order , SAMBA did not appeal from any inaction on its motion to join ASB&B.

The SAMBA And Shaw Actions.

The
payments from SWEC to SAMBA , and to reduce or disallow SAMBA' s claims against SWEc.13
Shortly thereafter , SAMBA filed an adversary proceeding against Shaw and SWEC , arguing that

Shaw assumed the liability on a " Guaranty" and " Payment Letter " from SWEC to SAMBA; or
that if Shaw did not assume the liability, then SWEC retained the liability. 14 SAMBA' s action

arose from a cure claim and proof of claim alleging the same theory.

g Order Referring Adversary Proceeding To Mediation , June 7 , 2004 (D. I. #28), ~ 4. 9 Transcript Of Hearing, April 25 , 2006 (D. I. #54J. 10 Reply To The SWE&C Liquidating Trustee s Opposition To Saudi American Bank' s Motion To Intervene And To Join Abdullah Said Bugshan & Brothers , April 24 , 2006 (D. I. #46J.
II Transcript

, (D. I. #54J.

12 Notice Of Appeal , May 10 , 2006 (D. I. #52J.
13 See 14

Complaint , August 1 2001 (D.I. #1 , Adversary Proceeding No. 01- 1120J (AI4- A35).

Memo. Opinion , August 31 , 2007 , at 3 (D.I. #79J (A542); Complaint Of Saudi American Bank , October 16 2001 (D. I. #1 , Adversary Proceeding No. 01- 7766 (PJW)J (AI). 15 Memo. OpirIion , August 31 , 2007 , at 30- 31 (D. I. #79J (A569- A570); Complaint Of Saudi American Bank , October 16 2001 (D. I. #1 , Adversary Proceeding No. 01- 7766 (PlW)J (All).
See

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To

described adversary proceedings , the debtors agreed to pay

SAMBA $1 million cash , and to permit SAMBA a $2. 5 million allowed claim. However ,

if

SAMBA prevailed against Shaw , SAMBA' s claim would reduce dollar- for- dollar

for every

dollar that SAMBA recovered in excess of $3 million. 16 The settlement provided that it was not
intended to have. .
intervene in the debtors '

s action against Shaw or SAMBA' s Motion to case against Saudi Aramco , but the Trust's

suffered the detriment of the $1 million cash payment , and the settlement does not provide for its
retum no matter how much SAMBA collects from Shaw.

Shaw and SAMBA agreed to
After cross-motions for summary judgment , this Court concluded that Shaw assumed SWEC'
liability to SAMBA , and entered judgment for SAMBA.
the debtors or the Trust , Shaw now claims that it must have succeeded to SAMBA' s rights to the
alleged " assignment

of contract proceeds.

16 See

Order Approving

, June 23 ,

2003; Exhibit A

(Settlement Agreement , ~ 7) (D. I. #4289 , Bankruptcy Case No. 00- 2142J.
17

Id. ~ 6.

IS

See ,

e.

Plaintiff Saudi

s Answering Brief To The

No. 01- 7766
19

2004 , at 1 (D.I. #81 , Adversary Proceeding (PlW)J (" As a preliminary matter , SAMBA has no objection to the District Court' withdrawal of its reference of this Adversary Proceeding to the Bankruptcy Court.
Motion For Withdrawal Of The Reference , June 30 ,

, Exhibit F Opinion , May 3 , 2005 , (D. I. #11 , Civ. No. 04- 834- SLRJ) (A470); Exhibit G
See

(ProposedJ Complaint In

Civil Case , May 4 2005 (D. I. #12 , Civ. No. 04- 834- SLRJ) (A490).
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IV. FACTUAL
Shaw s Motion Is Merely An Attempt To Assert A Claim Against The Trust That Is Untimely Under Any Measure , And Would Prejudice The Trust' Creditors If Shaw Can Assert The Claim

Even if it had a valid

, Shaw s Motion is an

around its failure to file any claim against the Trust for Shaw s liability to SAMBA. All time

limits to file a claim expired long
complaint almost five years before seeking intervention 2O
the Trust. Every bar date for filing a proof of claim

s adversary

, including the bar

date of August 2000 for filing prepetition claims , the Confirmation Order s deadline in January

2004 for filing claims arising from the
Plan s deadline of February 2004 to file administrative claims.

21 and the Third Joint

22 This Court entered its decision

and judgment against Shaw on the SAMBA liability more than two years before Shaw sought
intervention. 23 The
before Shaw moved to intervene.

s motion to intervene well over a year
24 Yet Shaw waited until June 2007 to claim any interest at all

in the Trust's action against Aramco. Shaw s claim is untimely under any theory.
Shaw s intervention at this late date

When the bankruptcy court sent the Trust to mediate with Aramco more than three years before

20 Complaint Of Saudi American Bank , October 18 2001 (D. I. #1 , Adv. No. 01- 7766 (PlW)J.

21 Findings Of Fact , Conclusions Of Law And
No. 00- 2142J
22

c. 9

Confirming Third Amended Joint Plan , January 26 , 2004 , ~ 23 (D. I. #4879 , Bankruptcy Case (" Confirmation Order
Id. Exhibit A (Third Amended Joint Plan), Art. XV , 9 A , ~ 1 , at 79- 80.
See 23

(ProposedJ Complaint In
2006 (D. I.

, Exhibit F

Opinion , May 3 , 2005 (D. I. #11 , Civ. No. 04- 834- SLRJ) (A470).

24 Transcript Of Hearing, April 25 ,
May 1 , 2006 (D.I. #50J.
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#54J; Order

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Shaw moved to intervene , Shaw claimed no financial

25 Shaw

permitted the Trust to bear the cost of negotiations that have consumed years of efforts , including

meetings in New York and
interest in the mediation between the Trust and Aramco - Shaw admittedly waited until the Trust

announced its belief that

26 prejudicing the

creditors who bore the cost of the settlement , and attempting to deny the benefit of those efforts
to the creditors who funded them.

This Court Has Determined Already That SAMBA Had No " Assignment Of Contract Proceeds " From BS&W , Much Less Any Assignment From SWEC So SAMBA Had No Riehts Aeainst SWEC To Which Shaw Could Succeed
Having been found liable for SWEC' s agreement to repay SAMBA , Shaw claims to be

subrogated to SAMBA' s rights. But SAMBA , and now Shaw , rely on an alleged " assignment

of

contract proceeds " from BS&W to SAMBA for Shaw s claim. But Shaw

of any such assignment than SAMBA had.

, Shaw does not and cannot provide

any evidence of a perfected security interest in BS&W' s " contract proceeds " much less to any
proceeds owing to SWEC.
The bankruptcy court denied SAMBA' s motion to intervene , finding that SAMBA had

no evidence that BS& W -

LookirIg first at Exhibit 1 to

, this is captioned

Contract Proceeds , I guess the first thing I would note is that it's dated the 98. But more January, 1995. You said the loan was in that document , quote Assignment of Contract Proceeds " recites the assignor

25

See supra notes 7 & 8. 26 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 12 (D. I. #61J (" On May 1

2007 , Debtors ' successor in interest , the SWE&C Liquidating Trust , filed another status report stating that the parties have agreed to the terms of a
documentation of the settlement.

believes the settlement will be complete and the parties will seek dismissal of this action ' within the next few weeks. '" (citations omitted) (A313).
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hereby assigns to the bank all the proceeds of the contract. Further down on that

column it says , The contract of this assignment in such form as may be required by payor , or if no specific form is required , by letter in substantially the following form. there s a form letter that says , We hereby advise you that we have executed an , Saudi American Bank. But assignment of proceeds in favor of that's not the letter that was sent , and I'm now looking at Exhibit 2 , which is a
quote Specific Payment Instruction Letter , close quote. , to , to the And it reads quote This letter" - and this Saudi Arabian Oil Company - quote This letter requests and authorizes you to pay Saudi American Bank , Floor (phonetic) branch , P. O. Box 842 , Alchobar
(phonetic) with a zip code ,

September 21 , 1994 ,

Saudi Arabia , for credit to our

compensation due from you under contract number 65004. It then goes on to say, and I quote We shall mark all our invoices presented to you to pay to Saudi American Bank , Floor Branch , P. O. Box " etcetera " for account of Bugshan , S & t sound like an W Company Limited. " Close , and me. It sounds like a direction
it identifies

, which is a Company. Isn t that what it May 11 , 2002 letter from the bank to the oil company, it references as assignment
of all payments ,
and it says

, We write to remind

letter dated September 21 , 1994 , paren (the , quote Specific Payment Instruction , requested and authorized Letter , close quote) a copy of etcetera. And in Exhibit 5 , the response from the oil company to the bank is to

confirm the assignment and
payment instruction letter which is not a letter your response is?

The bankruptcy court concluded that if SAMBA believed it had a right to recovery under Saudi
commercial law - an issue

hearing - SAMBA should pursue that right in a Saudi
In response to Shaw s Motion to intervene , the bankruptcy court

findings and conclusions:
As I stated in denying SAMBA' s motion to intervene , I doubt that BS&W
effected a valid

, which I

because BS&W never issued the kind of notice letter called for in the Assignment of Contract Proceeds.

27 Transcript of Proceedings (D. I. #54), at 628 Id.

at 24.

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For a number of reasons , the Specific Payment Instruction Letter does not effect the result that SAMBA asserts.

(1) Contrary to BS&W' s agreement in Proceeds to advise payors of the assignment of the contract proceeds to SAMBA the specific Payment Instruction Letter does not even mention an assignment.

(2) That
SAMBA should receive the proceeds. The
states in relevant part: "

This letter

American Bank , Fluor Branch , P. O. Box 842 , Al Khobar 31952 , Saudi Arabia for
credit to our

account any and all

as it may be changed from time to time. BS&W directs payment to go into " our account" at SAMBA , and not to SAMBA itself. The Payment Instruction Letter then goes on to state: " We shall mark all our invoices presented to you Pay to Saudi American Bank , Fluor Branch , P. O. Box 842 , Al
number 65004 ,
Khobar 31952 ,
Saudi Arabia

for account of ' Bugshan

S&

W Company Limited.

(3) As the
1994 , four months before the

, it

seems highly unlikely that the
pursuant to the instructions in the Assignment of Contract Proceeds.

(4) Finally, the Specific Payment Instruction Letter also states: " Payments
hereunder shall only be otherwise. " There

judgment being sought by the Trust against Saudi Aramco would be with respect to invoices submitted by BS&W. Indeed , two of the four counts of the Complaint (declaratory judgment and indemnification) would not likely be invoices submitted by BS&W. Thus , a judgment in favor of the Trust could be otherwise then from " invoices submitted by" BS&W.
It is Shaw s obligation to prove under applicable law that the Assignment
of Contract Proceeds and the

perfected security interest in the proceeds. On this issue , Shaw offers nothing in
addition to the
s intervention SAMBA failed to meet its motion , SAMBA' s counsel did not attempt to validate the assignment under Saudi law , or any other law. Thus , I conclude again that SAMBA has not proved that it

has a perfected security

legal or equitable rights to the proceeds , there is no basis to apply the doctrine of subrogation in Shaw s favor.

29 Memo. OpirIion , August 31 , 2007 , at 20- 22 (D.I. #79J (emphases in original) (citations

omitted) (footnote omitted) (A559- A561).
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This Court reached the same
intervention motion:

Given my view of the underlying facts , I decline to embrace the legal fiction upon

which SAMBA has to rely to justify

, that

SWEC' s potential liability for the conduct ofBSW under the Ras Tanura Contract extends to the Assignment , of which

conclude that , even if SWEC were deemed to be obligated under the Assignment a reasonable interpretation of the Assignment limits SAMBA' s rights thereunder to funds actually deposited in BSW' s bank account (i. , in SAMBA' s possession at any given time), as would Therefore , if funds collected by , SAMBA

may assert those rights in
Absent actual possession of the funds , however , I decline to rule that SAMBA has the broad , virtually unlimited right to claim any monies related to the Ras Tanura

Contract , especially in light of the added protection SAMBA acquired through the
Guaranty. 30

SAMBA ,

at least

, had the privity with non- party BS&W for the " Specific Payment Instruction
s theory.

Letter. " Shaw

Shaw

s theory

involving a contract to which

party
In- Kingdom Contract" between

beneficiary.

BS&W and Saudi Aramco. 3I But that contract precludes any claim by SAMBA or Shaw: " This

30 Saudi American Bank v. Saudi Arabian Oil Co. (In re Stone Webster Inc.),

Civ. No. 06-

399- SLR , 2007 U.S. Dist. LEXIS 63941 , at *7 (D. Del. Aug. 29 , 2007) (footnote omitted).
31

Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 3 (D. I. #61J (" , on January 22 , 1995 , BS&W alleged in SAMBA' s Complaint in
See , e.

assigned the proceeds from the In- Kingdom

Assignment of

Proceeds ) (A31O). The debtors ' adversary complaint against Saudi Aramco actually relied on two contracts:

(TJhe In- Kingdom

Out-of-

, a wholly-owned Kingdom Contract" ) between Aramco subsidiary of Saudi ARAMCO incorporated in Delaware and based Kingdom Contract and Out-of- Kingdom Texas. . .. , the ARAMCO Contract purport to be two , the always draw formal distinctions between the two ARAMCO Entities both responded to other entity on matters concerning the contracts.
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Contract shall not be deemed for the benefit of any third party nor shall it give any person not a
party to this Contract any right to enforce its provisions. ,, 32 As the bankruptcy court itself noted

that same theory would preclude any claim by SWEC or the Trust. 33 However , the Trust already

clarified that the Trust is prepared to file an amended complaint asserting claims unquestionably

belonging only to SWEC and its successor , the Trust , if settlement efforts are
Until then ,

the bankruptcy course stayed the case 35 Shaw did not

Shaw s Motion was both a breach of the stay and , at a minimum , premature before the filing of

the Trust's amended complaint.

This Court' s Findings And Conclusions Bar Shaw s Claim Because The Claim Neither Arises From An Assumed Contract , Nor Relates To An Assumed Liabilitv.
This Court' s decision that
debt

to SAMBA precludes Shaw

theory of intervention. First , the decision contradicts Shaw s claim that it is entitled to the Saudi
Aramco settlement because it acquired " any and all claims and causes of action. . .
against any third parties relating to . . . Assumed Contracts. 36 This Court did not find that Shaw

assumed the Saudi Aramco contract. To the

(Complaint , May31 , 2002 (D. I. #1), ~ 19) (AI9- A20).
32

Id. Exhibit A , 9 31.5 at A- 3 8 (A 78). 33 Transcript Of Hearing, May 11 , 2006 (D. I. #54), at

And this Debtor was not a party to the contract with the oil company either. I have a great deal of difficulty understanding how they are ever going to succeed on the merits of this case.
34

Id. at 26.
the

35 Order Referring Adversary Proceeding To Mediation , June 7 , 2004 (D. I. #28J, ~ 5 (" Until

parties report to the court that mediation efforts have failed to result in a consensual resolution of the disputes at issue in or related to the Adversary Proceeding, the Adversary Proceeding is and shall remain stayed. 36 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 18 (D. I. #61J (quoting APA)
(A316).
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Aramco contract was not " at

issue.

37 The only issue was the assumed liability ofSWEC'

s bank

debt in which SWEC agreed to pay offBS&W' s loan.

The Court's decision also precludes Shaw s claim that it is entitled to the Saudi
settlement because it acquired " any
any third parties relating to . . .
and all claims and causes of action. .

38 In defense against SAMBA'

s claim

Shaw argued that it
associated with" excluded assets or " arising under "
rejected contracts.

39 However , the Court

concluded that a guaranty " is a separate contract involving duties and responsibilities which are

different from the basic contract to which it is collateral." 40 Moreover , while SAMBA claimed

that the BS&W loan gave SAMBA a
Letter"
from

contract proceeds

" the " Payment

41 provides no security interest

kind. 42 Any alleged , but unperfected security interest that SAMBA may have had with BS&W a non- party to this action - is irrelevant to Shaw s claim to have a security interest " relating
to

its adjudicated assumption of SWEC's duties under the Payment Letter.

37 (ProposedJ Complaint In Intervention By The Shaw Group, Inc. , Exhibit F (Memo. Opinion
May 3 2005 , Civ. No. 04- 834- SLR , at 15 n. 12) (A485).

38 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 18 (D.I. #61J (quoting APA)
(A316).

39 (ProposedJ Complaint In Intervention By The Shaw Group, Inc. , Exhibit F (Memo. Opinion
May 3 2005 , Civ. No. 04- 834- SLR , at 8 (A478)).
40

Financeameria Private Brands, Inc. v. Harvey E. Hall, Inc. 380 A.2d 1379 (Del. Super. Ct. 1977)) (A485). 41 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 5 (D.I. #61J (A31l).
Id. at 15 (quoting 42 See

1377

(ProposedJ Complaint In

, Exhibit C (letter

Abdullah Said Bugshan & Bros. to Saudi American Bank , re " Re-scheduling of Bugshan Stone & Webster (BSW) loan facility, " December 22 , 1998) (A351).
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Multiple Agreements And Orders

The Bankruptcy Case Preclude Shaw From Assertinl! Anv Claim To The Proposed Saudi Aramco Settlement
In

Even if Shaw s assertion of a claim actually relied on a perfected security interest , were

otherwise timely, and were
could not overcome multiple bars to its

s findings and conclusions ,

Shaw still

the debtors or with the Trust , and the orders of the bankruptcy court.

The Sale Order
debtors bars Shaw s intervention:

s Asset Purchase Agreement (" AP A" )

with the

Except as provided in the Shaw Agreement , this Sale Order , or other order of this Court , after the liabilities or obligations with respect to the Assumed Liabilities and all holders of such claims are forever barred and estopped the Debtors , their successors or assigns , their property or the Assets.
Neither the APA nor any other order of the bankruptcy court permits Shaw to demand a recovery
from the Trust's hoped- for

settlement with Saudi Aramco. Shaw sought no

liability arising from SAMBA. The Trust , as the successor to SWEC , has " no further liabilities
or obligations with respect" to Shaw s assumed liability to SAMBA.

The APA further undercuts Shaw s claim. Relying in part on
Assumed Liabilities "
included " outstanding bank indebtedness

s provision that

" this Court found SWEC'

indebtedness to SAMBA to be an assumed liability. 44 The AP A provides explicitly that Shaw

must indemnify the Trust for " any Losses incurred or

43 Revised Order Under 11 U.S. c. gg , 365 And 2002 , 6004 , 6006 And 9014 , (A) Approving Asset Purchase Agreement , etc. , July 13 2000 (D. #340 , Bankruptcy Case No. 00- 2142J, ~ 41.

44 (ProposedJ Complaint In Intervention By The Shaw Group, Inc. , Exhibit F (Memo. Opinion
AP A define the

May 3 , 2005 , Civ. No. 04- 834- SLR , at 16 (" Sections 1.01 and 2. 03 and Schedule 2. 03 of the Assumed Liabilities ' as including ' outstanding bank indebtedness The record indicates that Schedule 3. , listing those contracts which relate to such outstanding
bank indebtedness as guaranties ,
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includes at least an indirect reference to the
) (A486).

Payment Letter. Defendant failed to payor contest

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indirectly, as a result of or arising from:

45 Therefore

, rather

than having a right of action
Shaw s own action.

, Shaw has a duty to indemnify the Trust for

In its Confirmation Order , the bankruptcy court released the debtors and their successors
from all unasserted security interests:

Except as otherwise provided in the Third Joint Plan or this Confirmation Order or in any contract , instrument , release or other agreement or document created in connection with the Third Joint Plan , on the Effective Date , all mortgages , deeds of trust , liens , pledges or other security interests against property of the Debtors Estates are fully released and discharged.
Though well

claims , neither SAMBA nor Shaw sought any agreement or order to preserve an alleged security

interest in a settlement with Saudi Aramco - even though the debtors had long-since announced
such a settlement , but were unable to
such claim ,

47 Having failed to seek preservation of any

both SAMBA and Shaw have violated the Confirmation Order s injunction:

45 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , Exhibit D (D. I. #61) (APA
Section 9 , from and after the Closing Date 9 9. 03: " Subject to and to the extent provided in this Buyer shall indemnify, defend and hold harmless Sellers ' Indemnified Persons , and each of them , from and against any Losses incurred or suffered by Sellers ' Indemnified Persons , directly

or indirectly, as a result of or arising from: . . . ( Sellers ' Indemnified Persons Sellers and any of Sellers (A374)).

" (A419); AP

46 Findings Of Fact , Conclusions Of Law And

C. 9

Confirming Third Amended Joint Plan , January 26 , 2004 , ~ 12 (D.I. #4879 , Bankruptcy Case security interest" is beyond No. 00- 2142J. That SAMBA dispute. In SAMBA' s appeal to this Court from the bankruptcy court' s denial of intervention SAMBA unapologetically asserted a right to a " first security interest" and a " first priority right" to alleged contract proceeds (Saudi American Bank' s Opening Brief In Support Of Its Motion For Stay Pending Appeal , January 16 , 2007 , at 2 (D. I. #8 , Civil No. 06- 399 (SLR), District of
DelawareJ).
47

s Motion To See , e. Debtors ' Answering Brief In Intervene And To Join Abdullah Said Bugshan & Brothers As A Defendant , December 9 , 2002 (D. I. #23), at 2 (" As represented to the Court by the Debtors , Saudi Aramco , and ASB&B at the
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Except as otherwise specifically provided in the Third Joint Plan and except as may be necessary to enforce a remedy or breach of the Third Joint Plan , from and after the Confirmation Date , all entities that have held , hold or may hold a Claim

or other debt or liability
precluded from: .

encumbrance; (iv) asserting a setoff, right of

kind
Plan;

liability or
, any action that

(v) commencing or continuing, in any manner or in

does not comply with or is
provided, however that nothing contained in this Confirmation Order or the Third Joint Plan shall preclude such persons from exercising their rights pursuant to and consistent with the terms of the Third Joint Plan. . . .
Neither SAMBA nor Shaw objected to confirmation of the Third Joint Plan , or insisted on a right

to seek a security

, despite ample notice and

opportunity to assert those theories before the Confirmation Order quashed them.

Even if all of

s claim to any proposed

settlement with Aramco , Shaw released all claims against the Trust with respect to any " Filed
Claims " - including SAMBA' s claim:

Except for the rights , provided for , or reserved in this Stipulation , effective as of the execution of this Stipulation: . . . (b) Shaw hereby releases and forever discharges each of the Consolidated Estates and all of their
current and former directors , officers , agents , affiliates , subsidiaries , employees attorneys , permitted assigns , predecessors , and successors , including without limitation the SWINC Plan under the Third Amended Joint Plan (the " Estate Parties ) of and from any and all manner of action or actions , cause or causes of action , in law or in equity, suits debts , liens , contracts , agreements , promises , liabilities , claims (including, but not
limited to claims for attorneys ' fees , costs and sanctions , damages ,

demands

losses ,

costs , or expenses of any nature

currently existing or arising in the

future

whether known or unknown , suspected or unsuspected , fixed or

2002 omnibus hearing in these cases , the Aramco final documentation and Court approval. . . . 48 Findings Of Fact , Conclusions Of Law And
No. 00- 2142J.
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October 3 ,

c. 9

Confirming Third Amended Joint Plan , January 26 , 2004 , ~ 16 (D. I. #4879 , Bankruptcy Case

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contingent
with respect to

concealed or hidden ,

latent or patent , which Shaw has or may have

the Filed Claims.

Thus , well after SAMBA asserted its claim against Shaw , Shaw settled all remaining issues with
the Trust , including any right to make claims against any settlement with Aramco.
V. SUMMARY

OF ARGUMENT

Shaw posits that the SAMBA loan related to BS&W' s contract with Saudi Aramco. So if
the Trust ,

as successor to SWEC ,

is entitled to

, that

recovery belongs to Shaw

any and all

claims and causes of action. . .

Liabilities or the Assumed Contracts. . . . ,,50 Shaw s theory that the bankruptcy court' s
denying intervention is defective suffers multiple defects:
Shaw s theory that the bankruptcy court

order

because of a typographical error about the
bankruptcy court' s finding that

any basis.

Shaw

s theory of

bankruptcy court to deny SAMBA' s motion to intervene

affirm. Like SAMBA' s motion to intervene , Shaw relies on an alleged " assignment of contract
proceeds " from BS&W to SAMBA. But , like SAMBA , Shaw s Motion lacks any evidence of an

, 2004 , ~ 9 (D. I. #69J (emphases added); see Recitals , ~ C (" approximately 5 700 claims (all of the Stipulation , the ' Filed Claims ) were filed ). The bankruptcy court ordered the Settlement Stipulation filed under seal pursuant to Bankruptcy Local Rule 9018- 1(b). However , the Opinion. (See Memo. Opinion , August 31 2007 , at 29- 30 (D. I. #79J (A568- A569). 50 Motion To Intervene By The Shaw Group Inc. , June 29 , 2007 , ~ 18 (D. I. #61J (quoting Asset Purchase Agreement By and Among Stone & Webster , Incorporated And The Shaw Group, Inc. Dated as of July 14 2000).
also

49 Settlement Stipulation (under sealJ, November 30

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assignment of contract proceeds " from non- party BS&W to SAMBA , much less for any alleged

assignment from BS&W or SWEC to

, Shaw lacks the constitutional

statutorily mandated interest necessary for intervention on any ground.

Even if its Motion were timely, despite Shaw s knowledge of the alleged basis for
intervention for at least five years , any theories that

alleged assignment into a right for Shaw to claim " contract proceeds " owed from Saudi Aramco
to non- party

BS&W do not involve

against Saudi Aramco. The lack of commonality bars permissive
For other reasons ,

Shaw also lacks any claim against the Trust or any security

interest in the Trust' s proposed settlement with Saudi Aramco:

The Court's Memorandum Opinion finding that Shaw assumed SWEC'
liability to SAMBA also bars Shaw s alleged claim " related
to

" an assumed contract or assumed

liability. The Court concluded that Shaw did not
further rejected Shaw s claim that SWEC' s liability to SAMBA was " associated with" the Saudi
Aramco contract.

The APA , the bankruptcy court' s Sale Order , and a Settlement Stipulation

among the Consolidated SWINC Estate , the Trust ,

and Shaw -

knew of and began defending SAMBA' s claim that Shaw assumed SWEC' s liability - released

any claims against the Trust arising from any " Filed Claims " including SAMBA' s claims.
Shaw s claim that the

incorrectly characterized" its claim as

one against the Trust
bankruptcy court's denial of intervention , nor correct. Shaw s claim for unjust
asserted against the Trust ,

not against Saudi Aramco , and Shaw

s Complaint In

asserts claims for equitable and affirmative relief against the Trust.
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Though not ruled upon by the

, Shaw s Motion was

coming five years after SAMBA filed its

, more than three

years after the last of the claims bar dates , more than two years after this Court found
liable on SWEC' s agreement to pay SAMBA , and well over a year since the

denied SAMBA' s motion to intervene for the

assignment."

until after the Trust announced that settlement was imminent to seek intervention. Shaw cannot

use intervention to substitute for the failure to file a timely claim against
The lack of timeliness bars intervention under any theory.

Under the well-recognized rule that a reviewing court affirms a lower court on any basis

found in the record , ample reasons exist to affirm the bankruptcy court' s conclusion that Shaw
lacks standing or sufficient interest to

VI. ARGUMENT
Shaw s Interest Derives From A Facially Deficient " Assignment" From A Non- Party To A Non-Party. And Cannot Support Intervention- Of- Rieht

Like SAMBA , Shaw Lacks The Necessary Interest Standine To Assert A Statutory Rieht To Intervene

III

Shaw s opening salvo is its claim that " (tJhe Bankruptcy Court mistakenly maintains that

Shaw argued it was entitled to
intervention. '
Permissive intervention ,

Rule 24(a)(2), which provides for permissive

however , is allowed under Rule 24(b), as Shaw correctly

argued in its Motion to Intervene.

(Opening Brief at

Seizing on an

inconsequential typographical error is not enough to divert attention from the many reasons why
Shaw lacks any right to intervene. This Court need not belabor the argument.

See , e. , Nicini

212 F. 3d at 805 ("We may affirm the District Court on any grounds supported by the record.

First , Shaw claims to have an unconditional

Rule of Civil Procedure 24(a)(1) and pursuant to Bankruptcy Code section 1l09(b), giving " (aJ
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party in interest ,

including the debtor , the trustee , a creditors '

committee ,

an equity security

holders ' committee ,

a creditor , an equity security holder , or any indenture trustee " a right to

raise , appear , and be heard on any issue in a case under

11 U. S. c. 9

However , even the seemingly broad statutory dictate cannot overcome the need for timeliness , or
the constitutional requirement 0 f " standing
Like all statutes , section 11

restriction. Accordingly, standing on any party in interest in any proceeding in a case , the section cannot be
construed in a

s case or

requirement.
7 Alan N. Resnick ,

Henry J. Sommer

Collier on Bankruptcy

~ 1104. 04(4J(aJ (14th ed. 2006);

Hobson v.
9 11 09(b) does

227 B. R. 638 , 649 (D. Md.

Although

be heard on any issue in a case under (Chapter

does not obviate generally applicable rules of standing.

The constitutional

standing " requires 1) injury- in- fact;

2) a causal

connection between the alleged injury and the conduct being challenged; and 3) a likelihood that
the injury will be redressed by a favorable decision.

Nat ' I R. R. Passenger Corp. v. Pa. Pub. Util.
see also Pansy v. Borough of Stroudsburg,

Comm '

342 F. 3d 242 , 254 (3d Cir. 2003);

23 F.

772 777 (3d Cir. 1994) (" The appellees have not challenged the Newspapers ' standing in this
appeal. Nevertheless , we are obliged to consider whether the
intervene in this action.
Hillside Enters.

, Inc. v. Carlisle Corp.

944 F. Supp. 793 ,

797

(E. D. Mo. 1996) (noting that

inherent in Rule 24(a) is a requirement that would- be intervenors

have Article III standing to litigate their claims in federal court" (citing

Mausolf v. Babbitt
C. 1996)

3d 1295 , 1299- 1301

(8th Cir. 1996));

Stewart v. Rubin 948 F. Supp. 1077 1103 (D.

The Putative Intervenors , as putative party plaintiffs , have the burden of alleging facts which
establish their standing. "

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The bankruptcy court did not
9 11 09(b)

, noting that

a ' party in

" (Memo.

Opinion , August 31 2007 , at 14 (D.I. #79J (A553).
a party in

The test to determine whether an entity is

whether the
Baron

outcome of the proceeding so as to require representation.'''

Budd, P. c.

v.

Asbestos Claimants Comm. 321 B. R. 147 ,

158 (D.

J. 2005) (quoting

In re Torrez

132 B.

924

934 (Bankr. E. D.

Cal. 1991)). Shaw

Even a "judgment creditor " who might

standing where it has no privity to the

Hillside

Enters. , Inc. 944 F. Supp. at 797 (" Houston has failed to provide any caselaw which supports its

argument that as a judgment creditor , by virtue of a consent judgment entered in another lawsuit

it has a legally cognizable right or protectable interest in dictating the manner of distribution of a
judgment rendered in another lawsuit." ). Shaw

, unlike

SAMBA , does not have even an allowed claim in the bankruptcy

yet adjudicated claim. Like SAMBA , Shaw claims only an " assignment" from a third- party,

BS&W. BS&W
States. Unlike SAMBA , Shaw has no privity even with BS&W.

N either SAMBA nor

evidence of any perfected security
successor , the Trust.

Cf, e. g., Bramble Transp. , Inc. v. Sam Senter Sales, Inc.

294 A.2d 97 ,

102

(Del. Super. Ct. 1971) (explaining that , under Uniform
financing statement" (Form UCC- l)
is

, a properly filed
in the subject

property against the debtor s creditors
of a security interest

aff'

294 A.2d 104 (Del. 1972). Rather than

, Shaw

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findings and conclusions that Shaw s assumption of the SWEC Guaranty is not connected with
BS&W' s agreements with SAMBA or Saudi Aramco.
Shaw s lack of privity to the contract arguably at issue in this adversary proceeding - the

BS&W agreement with Aramco Vazman , SA.
418 F. Supp. 1084 , 1086 (S.

See ,

e.

Y. 1976) (" (UJnder

both

New York law and general contract principles , a third party may sue on a contract only if the
parties to that contract intended to confer a benefit on him when contracting; it is not enough that
some benefit incidental to the performance of that contract may accrue to him. "
Am. Druggists ' Ins. Co. (In re Nat'! Buy- Rite, Inc.),
11 B. R. 191

McDaniel v.
Ga. 1981)

194 (Bankr. N. D.

It must clearly appear from the contract that it was intended for the benefit of a third party.

The BS&W- Saudi Aramco agreement explicitly precluded claims by third parties , and

neither SAMBA nor Shaw can claim third- party status to intervene in the Saudi Aramco Action.

Lacking the necessary privity, Shaw has no
notwithstanding its claims of an absolute right to intervene under the Bankruptcy Code.
Shaw Lacks A Sufficiently Protectable Interest To Support Intervention As A Matter Of Rh!ht.
As conditions to intervention-of-right , Rule 24(a)(2) requires that:
(1) the application for intervention

interest in the litigation; (3) the interest may be affected or impaired , as a practical

matter by the disposition of the represented by an existing party in
intertwined , each must be met to support intervention as of right.

Harris v. Reeves 946 F. 2d 214 , 219 (3d Cir. 1991) (citation omitted). Intervention also requires
a direct , legally protectable interest , as opposed to a contingent or remote interest.
Id.

No less than it was under Rule 24(a)(1), Shaw s lack of privity to the contract arguably at
issue in this action is fatal to any claim to intervention-of-right under Rule
Vazman , SA.
418 F. Supp. at 1086- 87;

See , e.

McDaniel

11 B. R.

at 194. But in addition , for purposes

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of Rule 24(a)(2), the proposed intervenor

s interest " must

be significant , must be direct rather

than contingent , and must be based on a right which belongs to the proposed intervenor rather to
an existing party to the suit."

Vazman , SA.

418 F. Supp. at 1085- 86;

see also McDaniel

R. at 194 (" The mere fact that a person would benefit from the performance of the agreement

is not sufficient to make that person a third party beneficiary.

A direct interest does not exist if the
See ,
e.

possible

recovery.

, Am. Mar. Transp. , Inc. v. United States 870 F. 2d

1559 ,

1562 (Fed. Cir. 1989) (" The

interest of an applicant non- party having no privity claim in a contract, the terms of which are

disputed by the parties to it , also has not been recognized as legally protectable , even when the

outcome of a contract action is almost
impact on the applicant."

McDaniel

11 B. R.

at 194 (" (IJntervention as of right cannot be

allowed on the ground that the outcome of a suit may increase or decrease the collectability of a
claim. Other courts have

s contingent interest in the
Pasha Auto

pending litigation is not sufficient to justify intervention.
Phila. Reg'! Port Auth.

Civil Action No. 96- 6779

1997 U. S.

Dist. LEXIS 20511 , at *13 (E.

Pa. Dec. 23 ,

1997) (" Mere economic interest in the outcome of the litigation is
). The

support a motion to intervene.
SAMBA'
court.

, as this Court found in

s case ,

the proposed intervenor must
1997 u.s. Dist.

See ,

e.

, Pasha Auto

, at *13 (" The

mere fact that a lawsuit may impede a third party s ability to recover in a separate suit ordinarily
does not give the third party the right to intervene. "
(quoting

Mountain Top Condo. Ass ' n v.

Dave Stabbert Master Builder, Inc. 72 F. 3d

361 ,

366 (3d Cir. 1995)).

A claim to proceeds that remain " purely contingent upon a favorable judgment" will not
support intervention.

See Gen. Star Indem. Co. v.

224 F.

D. 372 , 376

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(D.

I. 2004) (" Although identification of an interest in a
Mountain Top Condo.
D. 180

sufficient to allow intervention , an actual fund must exist." (explaining
Ass
72 F. 3d at 366));

see also Rigco , Inc. v. Rauscher Pierce Refines, Inc. 110 F.

184 (N. D. Tex. 1986) (" The possibility of a

available at the conclusion of

lawsuit does not

, substantial , legally

protectable interest under Rule 24(a)(2).

Shaw

s claim - that it needs to irItervene

assignment"

from BS&W to SAMBA - is

, Shaw

involvement in proving an " assignment" that is otherwise not at issue in this action would " only

cause inordinate delay and place a great burden on the Court and the existing parties.

Vazman

SA. 418 F. Supp. at 1087 (denying permissive intervention). This Court was fully justified in so

finding on SAMBA' s

motion to intervene ,

and would be all the more justified in finding the
, alleged

same on Shaw s Motion ,

where Shaw

assignment " but claims only as an alleged subrogee that

the litigation to prove Shaw s right to the alleged " assignment."
SAMBA' s Claimed " Assignment" Does Not Involve Common Questions Of

Law Or Fact With The Trust' s Claims Against Saudi Aramco , Precluding Permissive Intervention.
No less so in permissive intervention , an intervenor must have standing.

See McDaniel

11 B. R. at 195 (construing permissive intervention; " (AJ party has standing to prosecute a suit in

federal court only if he is the real party in interest. This rule applies to intervenors as
the original parties to the

). Therefore ,

Shaw

s lack of standing precludes permissive

intervention - regardless of how the

Additionally,

permissive intervention is available only " when an applicant's claim or defense and the main
action have a question oflaw or fact in common. . . . "
OHS West:260409776.

Fed. R. Civ. P. 24(b).

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At best , Shaw is merely a claimant under an alleged but far- from- proven subrogation to
SAMBA' s claim to an " assignment" - a matter that

separate and apart from any issue in the litigation between the Trust and Saudi
factor frustrates even permissive intervention pursuant to Federal Rule of Civil Procedure 24(b).
Hillside Enters.

944 F. Supp. at 798 (denying permissive
s " claims

judgment creditor

where intervenor

do not involve common questions of law or fact as the
Inc. v. Visa In!'! Servo

lawsuit"

see also MasterCard In!'! ,

471 F. 3d 377 , 390 (2d Cir.

2006)
relationship to one of the existing parties , but " is a stranger to the contractual dispute " between
the existing parties).

Whether intervention-of-right or permissive intervention , Shaw s rights under SAMBA'
alleged " assignment"

from BS&W " arise out of (SAMBA' sJ

agreement(J with a party not

subject to the jurisdiction of this Court" - BS&W.
permissive intervention is not appropriate. Id.

Vazman , SA. 418 F. Supp. at 1087. As such

But even if an assignment with a third- party were

sufficient to confer standing in the litigation between the Trust and Saudi Aramco , this Court is
not bound to accept SAMBA' s (or Shaw s) conclusory claims ofa valid assignment.

Contrary to SAMBA' s earlier claim that the

accept its conclusory allegations without question (and without examining the
SAMBA attached to its proposed complaint- in- intervention), " substantive law " must support the
proposed intervenor
s alleged interest in the matter.

See , e. g., Am. Mar. Trasp. , Inc. 870 F. 2d at
or

1562. That requirement would be meaningless if this Court had no right to test SAMBA' s
Shaw
s claim. This Court has every

, and to place the
Cf McDaniel 11 B. R. at 195 (finding against

burden on Shaw to prove its right to

permissive intervention where party failed to submit security agreement under which it claimed
OHS West:260409776.

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standing; " Therefore

the Court cannot make a determination as to (the intervenor sJ standing to

enforce this

Under

, the Court concludes

intervention should not be allowed. ). Like SAMBA

burden and this Court is justified in affirming the bankruptcy court order denying intervention.

Shaw Unambiguously Released Any Claim " Relating To " Its Liability On The Guarantv And Payment Letter.

As discussed in
prevent Shaw from
addition , Shaw unambiguously

D above

Trust. Shaw s response to its unambiguous release of claims in the Settlement
the Trust is a curious and perplexing argument:
The defined term ' Filed Claims,' refers to the ' approximately
5

700 claims ' filed

against the Debtors as of November 30 , 2004.

(TJhe Bankruptcy Court found that Shaw s claim to the proceeds of the Kingdom Contract was a claim with respect to a Filed Claim , and thus Shaw had waived its claim to a portion of the proceeds of the In- Kingdom Contract."
The Court found that a cure claim filed by SAMBA relating to the Guaranty and Payment Letter existed as of November 30 , 2004 , and thus it is a ' Filed Claim
under the Settlement Stipulation.

(TJhe Court further found that Shaw s claim to a portion of the
the In- Kingdom Contract is a claim ' with respect to ' that Filed Claim.

(TJhe claim that Shaw seeks to assert in the Saudi Aramco Proceeding is not a claim against the Trust , but rather is a subrogation claim against Saudi Aramco.
(Opening Brief at 21.)

subrogation
beneficiaries

allegedly arises from a contract that precludes any recovery by alleged third- party
(see supra

note 32), that it arises from a claim filed against both Shaw and the debtors (and not a
(see , e.

cure claim filed solely against Shaw as
2007 ,
at 30 (D.

Memo. Opinion , August 31

I. #79J (A569)), and that it

relates to

" SAMBA' s claim that

OHS West:260409776.

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either SWEC remained liable on the
Guaranty and Payment Letter (id.

, or

at 31 (A570). Indeed , if Shaw were not found liable on the

Guaranty and Payment Letter , Shaw concededly would not be asserting its right to
(See ,
e.

Opening Brief at

Shaw s intervention in the Saudi Aramco

appropriate and necessary as a result of this Court' s prior grant of summary judgment in favor of

the Saudi American Bank. . . .

While implying - without offering any proof - that the SAMBA claim was not a " Filed
Claim " Shaw
executed the Settlement Stipulation , both

(aJthe time the parties

assumed liability on account of the
The Bankruptcy Court never
face.

" (Opening

see also id.

) Shaw s allegations about the Trust's belief lack any evidentiary support. Shaw

on a declaration from the debtors ' former chief restructuring officer , not on any admission by the
Trust. (See id.

(citing to Declaration of James P. Carroll , undated (A466)).

As noted above , this Court has ruled already that " ( c
question of law

Ambiguity exists only when a
Saudi

susceptible of different interpretations or may have two or more
American Bank v. Shaw Group, Inc. (In re Stone

Webster, Inc.),

Civ. No. 04- 834- SLR , 2005

S. Dist. LEXIS 7912 , at *18 (D. Del. May 3 , 2005). Nothing in the

ambiguous. The Trust did not sandbag Shaw about a claim for which Shaw was
had already been litigating with SAMBA for more than two years:

OHS West:260409776.

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(PJrior to (theJ November 30 , 2004 Settlement Stipulation Shaw was well aware that there was a serious risk that it could have liability in favor of SAMBA arising

out of the Guaranty and
parties ' entry into the the Settlement Stipulation release provision precludes any right to future revenues from the In- Kingdom contract at the expense of SWEC , now the Trust. As Shaw

has waived the right to
obligation , allowing Shaw to intervene in the Saudi Aramco Proceeding serves no purpose.
(Memo. Opinion , August 31 , 2007 , at 34 (D. I. #79J (A573).

Shaw s Argument For Unjust Enrichment , And That The Bankruptcy Court Mischaracterized Its Claim. Are Not Only Incorrect But Contradictory

Shaw Fails To Make A Valid Claim For Unjust
With the citation of no law whatsoever , Shaw argues that " the Trust would be unjustly

enriched if Shaw is forced to pay a debt that the
Shaw never assumed. " (Opening
) This Court has already

s theory

that Shaw can submit an undated declaration from a non- lawyer who purports to interpret the
APA.

See Saudi American Bank 2005 U.S. Dist. LEXIS 7912 , at *18.

address the bankruptc